After seeking other avenues to put their money to work during the five-year period following the 2008 financial crisis, investors have flocked back to equity mutual funds over the last 18 months. During the 2008-2012 timeframe, equity funds had average annual net outflows of roughly $86 billion, while taxable bond funds had average annual net inflows of more than $193 billion. Equity fund net outflows peaked at $200.9 billion during 2008, the year of the financial meltdown, and investors did not completely embrace equity funds again until 2013, when net inflows of more than $194 billion went into equity funds. Investors have continued to seek equity funds in 2014; equity funds’ year-to-date net inflows of $93.5 billion put their 18-month total at $287.9 billion.

The net outflows for equity funds from 2008-2012 were in direct contrast to the five-year period (2003-2007) preceding the Great Recession. During that time, equity funds had average annual inflows of more than $111 billion. Taxable bond funds also had positive net inflows during that time. Their results (net inflows of $84 billion per year on average) for that five-year period were comparable to their inflows over the past 18 months (total net inflows of $94.4 billion), but substantially less than their numbers when investors were looking for safe havens after the financial crisis.

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